Netflix (NFLX) reported fourth quarter earnings following the bell on Tuesday, revealing stronger-than-anticipated results while simultaneously outlining plans to significantly ramp up its content rollout throughout the coming year. The streaming giant also announced a pause in its previously established share repurchase program, a decision largely influenced by the pending acquisition of Warner Bros. Discovery (WBD). The company’s revenue for the fourth quarter reached $12.05 billion, exceeding Wall Street’s consensus estimate of $11.96 billion, a figure aligning with Netflix’s own internal forecast. Revenue for the full year demonstrated an 16% growth, hitting $45.2 billion, surpassing the previously projected $45.1 billion. Earnings per share came in slightly above expectations at $0.56, compared to the $0.55 anticipated by analysts. This performance followed the 10-for-1 stock split implemented in mid-November. Netflix now reports a global membership base exceeding 325 million. Looking ahead, the company is projecting revenues between $50.7 billion and $51.7 billion for the fiscal year 2026, representing a growth rate of 12%-14%.
The company’s adjusted first-quarter forecast indicates a 15.3% revenue increase to $12.16 billion, alongside an expected earnings figure of $0.76. This projection surpasses the $10.54 billion anticipated by Wall Street, with adjusted earnings of $0.66. The company’s slower growth trajectory signals a renewed focus on expanding its original content offerings in the year ahead. Uncertainty surrounding the Warner Bros. acquisition also played a role in influencing the stock, which experienced a decline of over 5% in premarket trading on Wednesday.
In its shareholder letter, Netflix highlighted a 9% rise in viewing of its original content during the second half of the year, though this was partially offset by a decline in engagement with its non-branded content. “This decrease primarily reflected a lower volume of licensed, second-run content across most regions following an elevated period of licensing during 2023-2024 as a result of the WGA strike, which temporarily shut down new production,” the company stated. CFO Spencer Neumann indicated that “you should see higher year-over-year content expense growth in the first half of ‘26, growing off of that smaller base that we had in the first half of last year.”
Following the release of the results, Frank Albarella, KPMG US sector leader of Media & Telecommunications, commented to Yahoo Finance, “As catalogs grow, costs rise, live formats expand, and experiences and acquisitions reshape expectations. Breadth is no longer a simple advantage; it’s a more complex responsibility. The real work now is transforming that breadth into something coherent, adaptable, and resilient enough to define the next era of the industry.”
Prior to the market open on Tuesday, Netflix amended its agreement for the acquisition of Warner Bros. Discovery to an all-cash transaction at $27.75 per share of WBD, representing a value of $72 billion. This was an increase from Paramount Skydance (PSKY)’s all-cash offer of $30 per share, or $108 billion, which included the cable and news assets of the combined company. Netflix is solely pursuing the film and streaming assets of Warner Bros. Paramount, Netflix, and Warner Bros. logos are shown in this illustrative image dated December 8, 2025. REUTERS/Dado Ruvic/Illustration/File Photo.
During the call with analysts, co-CEO Gregory Peters responded to a question about potential price increases, stating, “There is no impact or change to our approach and how we’re running the business in that regard.” The company also plans to continue releasing Warner Brothers films with a traditional 45-day theatrical window before they become available on streaming. Regarding regulatory approvals, co-CEO Ted Sarandos stated, “We’ve already made progress towards securing the necessary regulatory approvals.” He added, “Our deal strengthens the marketplace, and it ensures healthy competition that will benefit consumers and protect and create jobs. That’s why we’re confident in the approval.” Brooke DiPalma is a reporter for Yahoo Finance.
